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Accounts Payable (AP), like many other functions of everyday business, has become almost entirely digital thanks to new technology and automation.
Gone are the days of paper ledgers and manual data entry. Updated AP systems allow ACH electronic processing, invoices and receipts sent via email and scanned documents that can be searched for in a single repository.
This newfound ease eliminates headaches brought on by manual processes and helps to do away with human error. At the same time, technological advances need to be governed by secure cybersecurity practices that ensure confidential information stays protected.
Effective verification processes and employee awareness of security protocols are vital to making sure your AP – which includes some of the most confidential information a company has – is less vulnerable to hackers and software malfunctions.
If you’re in the market for an upgrade to your AP system or processes, information security should be top of mind. It seems like a no-brainer; however, there are particular features you should never go without when it comes to updating your AP system. Keep the following security tactics in mind when looking to refine your payment processes.
Two Factor Authentication
Fraud is the most significant risk faced in the AP sector. More than 80 per cent of companies were targeted in 2018, according to the Association of Financial Professionals (AFP).
The AFP reports that check fraud has decreased in recent years, which may seem like good news. However, AFP says the decline in check fraud has been replaced with increased fraudulent activity on ACH debit and credit transfers.
Two-step authentication is an easy way to help prevent fraud. Through two-step authentication, an individual needs to provide a second form of authentication, like a one-time use code, after delivering an initial credential – a username and password, for example –to prove their identity.
The second form of authentication might be an email sent to the user or a phone call providing the code to verify that they are allowed access to the system. In the AP space, two-factor authentication adds another layer of protection and should come standard with any new AP technology.
Machine Learning Is Your Friend
Companies should also leverage an AP module that offers built-in machine learning capabilities that can detect fraud over time. Machine learning can catch potential fraudulent activity on small transactions that humans might ignore, or those that are too cumbersome to monitor manually.
A machine learning algorithm can be programmed to look for anomalies in continued transactions to determine if something is amiss. If the algorithm detects something out of the ordinary, the AP system will flag the transactions in question.
This eliminates work for employees and also helps to delegate specific duties related to a company’s AP, therefore creating a more defined process and lessening the likelihood of fraud and human error.
Check Out: Top Fraud And Breach Protection Companies
Keep Your Employees in the Know and Don’t Forget the Basics
All employees, no matter department or position, should be aware of general security precautions and ways to prevent fraud.
Many hackers prey on lower-level workers through Spear Phishing. Spear Phishing refers to hackers impersonating employees or some other “trusted” source to steal confidential information. A Spear Phishing attacker might pose as a C-level executive and request that subordinate transfer money or divulge sensitive records.
All the more reason that your employees should go through information security training and understand how to identify potentially fraudulent activity. The necessary employees should be trained whenever a new AP system or process is installed.
And, of course, comprehensive safeguards should always be in place – updated software, a disaster recovery plan, secure encryption and ongoing risk assessments.
A culture of awareness, secure data security procedures and up-to-date technology are all essential components of a successful AP system.